Optus doubles its NBN customers

Optus has said its 'solid quarter' was thanks to the addition of mobile and NBN customers, along with its media content offerings and mobile network investment to expand 4G to 96.4 percent of the population.
Written by Corinne Reichert, Contributor

Optus has credited its positive quarterly financial results to its network investment efforts, media content suite, and growth across mobile and National Broadband Network (NBN) subscribers.

During the quarter to June 30, Optus reported increasing its NBN customer numbers by 105 percent year on year, from 136,000 in Q1 2016 to 279,000 in Q1 2017.

"Australia Consumer reported an increase in operating revenue of 6 percent in the first quarter ended 30 June 2017. The increase was driven by higher mobile and NBN revenues," Optus said.

"In mass-market fixed, operating revenue grew 13 percent mainly on higher NBN revenue driven by NBN customer growth of 143,000 from a year ago."

Offsetting its falling mobile average revenue per user (ARPU), Optus reported growth across mobile customers, up to a total of 9.8 million: 3.7 million prepaid, 5 million post-paid, and 1.04 million mobile broadband customers.

While Optus did not disclose its mobile penetration rate or market share, its 4G network now reaches more than 96 percent of the Australian population.

"The number of 4G mobile customers increased by 84,000 this quarter, resulting in the total 4G customer base increasing to 5.81 million as at 30 June 2017," Optus said.

"Optus continued to invest in its mobile networks, reaching 96.4 percent of 4G population coverage with 6,187 sites upgraded to 4G, of which 5,156 have been upgraded to 700MHz spectrum."

During the quarter, Optus also announced that it will be investing AU$1.5 billion in improving its mobile coverage across Australia -- attributing this to the government's decision not to declare wholesale domestic mobile roaming -- and last month added that it will spend AU$1 billion to build 500 new mobile sites and upgrade 1,800 sites to 4G in regional areas by the end of June 2018.

"The AU$1.5 billion primarily will go towards our mobile network, and will go towards building a significant number of new greenfields sites primarily in the regional areas," CEO Allen Lew told ZDNet in May.

"There will also be within that AU$1.5 billion a densification of our metro networks in the capital cities."

Optus also invested AU$1.5 billion in capital expenditure during the 2016-17 financial year, expanding its 4G network by deploying 4.5G services, small cells, and voice over Wi-Fi.

"Our first-quarter result is built on consistent investment in our network and the creation of content and new services that resonate with customers, with the promise of more to come," Lew said on Friday.

"Our comprehensive regional and metropolitan network investment strategy is delivering positive momentum for our business. With National Geographic and our exclusive English Premier League offerings, we are looking to expand the appeal of our content suite to even larger audiences with an appetite for premium entertainment and game-changing content."

Optus' mass-market broadband ARPU rose from AU$52 to AU$54 per month thanks to the addition of its pay TV service Fetch to this category, while the entertainment partnership with Nat Geo announced last month is part of what Lew told ZDNet is the telco's next move to become a "mobile-led multimedia service provider".

Optus' self-described transformation into a multimedia company began with its acquisition of the exclusive Australian broadcast rights for the English Premier League a year and a half ago.

Lew told ZDNet that Optus has the Premier League subscriber numbers it was expecting, but wants to ramp this up during the upcoming 2017-18 football season by implementing more "interactive" and multimedia-focused elements to the experience.

Calling it a "solid quarter" overall for Q1, Optus reported a total net profit of AU$171 million, slightly down from the AU$173 million reported for the same quarter last year, on revenue of AU$2.1 billion, up 4.8 percent from AU$1.999 billion.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) were AU$662 million, up 2.6 percent from AU$645 million.

Consumer mobile made AU$1.2 billion in revenue, up 6.1 percent; consumer mass-market fixed made AU$33 million, up 13.2 percent thanks largely to a 10 percent rise in pay TV up to AU$28 million revenue; and total wholesale fixed was down by 8.7 percent to AU$141 million after declines across data and IP, voice, and satellite.

Its enterprise segment saw ICT and managed services rise by 3.1 percent to AU$146 million, data & IP and mobile remain stagnant at AU$83 million and AU$72 million, respectively, and voice drop by 6.4 percent down to AU$79 million.

Optus pointed out that for future enterprise earnings, it won the tender for the Commonwealth Games during the quarter, also pointing towards its introduction of cloud-based telephony system Optus Loop.

Optus in May announced a full-year net profit of AU$794 million, down from AU$901 million a year earlier, on operating revenue of AU$8.43 billion, down from AU$9.12 billion, and EBITDA of AU$2.67 billion, down from AU$2.77 billion.

Optus attributed its full-year results to "heightened price competition" in the enterprise sector, and increased content costs in the consumer segment.

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